After contentious discussion of the issue at last week’s town council meeting, Ocean View Mayor Gary Meredith and Councilman Roy Thomas spent time this week working out a compromise solution designed to maintain the town’s take-home policy for police vehicles.
The plan was presented Tuesday at a meeting of the town’s Long Range Financial Planning Committee. It calls for a replacement schedule for police vehicles of approximately 1.3 cars per year, extending the ideal lifespan for the vehicles from a previous estimate of five years to at least seven years.
That change alone drove the anticipated costs of the program down from $420,000 over the next five years to just $265,000, covering the purchase of four cars: one in each of the fiscal years between 2009 and 2011, two in 2012 and one in 2013.
With the reduced price tag, the Meredith-Thomas plan utilizes a variety of funding options to pay for the costs.
The town’s $25,000 annual police grant from the Sussex County Council is expected to cover nearly the base cost of each car, at $25,000 per year. An additional $35,000 will need to come from other sources to cover the remaining costs of the cars — roughly $30,000 total — and the typical $30,000 in equipment costs to outfit a police vehicle.
The plan calls for $10,000 of that $35,000 to come annually from the town’s “to be determined” funding pool, which was previously allotted to various small purchases from throughout town departments.
Town Manager Conway Gregory said he planned to hold the wall against funding for the take-home policy and police department in general being pulled from other departments, including provisionally dividing those “TBD” funds into three equal parts. If the police department needs more than its one-third share, he said, it will have to come from cuts within the department, unless the council directs him otherwise.
Some of the remaining $25,000 in costs for each new police vehicle will come from a delay in hiring to fill a part-time police officer position for three more years. The position costs the town about $50,000 per year, but it has not been filled for the last three years, when the previous part-time officer went to a full-time role. The plan calls for the position to be filled for the 2012 and 2013 fiscal years.
Gregory said he had looked for funds in existing amounts that had been set aside for capital improvements to drainage and roads but found there was not enough in the accounts to really consider it a feasible funding source. He also said he wanted to avoid taking money to support the program from sources outside the public safety department.
Thomas said he had wanted to make sure the new seven-year life estimate for a police vehicle was realistic. His study of the life expectancy of current OVPD vehicles shows ages ranging from just 769 days for two newer vehicles to as much as 3,940 days for a car retired to use by the Citizens Auxiliary Patrol (CAP) and a spare patrol unit with nearly that much longevity. The oldest regularly used patrol vehicle in the OVPD right now has 2,632 days under its belts.
According to Thomas, the police vehicles are driven an average of 38 miles per day. The two oldest vehicles have between 125,000 and 130,000 miles on the odometer. Based on mileage for the police fleet, that works out to an average life of 3,284 days for a vehicle — nearly nine years.
On that basis, Thomas said he considered the seven-year life expectancy of the new vehicle replacement plan to be realistic, “if only theoretically,” he cautioned, acknowledging that some might last five years while others might reach that nine-year point, evening out at seven on average.
“It’s a good plan,” Meredith declared. “We’re getting at least one (car) every year, instead of going without. And it looks like we can afford it — based on the numbers we have at this time.”
Gregory cautioned committee members Tuesday not to become overly confident that those numbers will make the program and its financing work for the town in reality and over the long haul.
“Remember, there are a lot of ifs in the next five years. As those ifs change, the budget changes. We may need to look at getting more than seven years out of a car. It will depend on the budget. It will depend on finances,” he warned. “These purchases are predicated on the money being there.”
Councilman Bill Wichmann objected to the presentation on two points: (1) he said he had not been informed that the issue was being discussed between the mayor and Thomas, let alone been included in the process; and (2) to the “doom and gloom” tone regarding the town’s finances.
“My glass is more than half full. We are in a downturn, but it is going to turn again,” he said. “To say that the end of the world is coming is gloom and doom, and I don’t appreciate that.”
Transfer taxes raise budget concerns
The plan to pay for the police vehicle take-home policy was just one aspect of the town’s budget that was discussed at Tuesday’s meeting as the town prepares to adopt the 2009 fiscal year budget in April.
In presenting the latest draft of the budget, Gregory again referred to the plan as a “sunny days, blue skies projection.”
“If that is not correct, we will know in a year or so,” he said, “and we will have to make adjustments.”
The current draft of the budget looks for some $5 million in property tax revenue over five years, plus $5.5 million in transfer tax revenue and $630,547 in building permit fees.
Those projections include on-schedule completion of proposed projects at Fairway Village (recently given final plan approval by the town) and Canal Landing, which is currently neither owned by the proposed developer nor annexed into the town.
Committee member and Realtor Marc Grimes said he was satisfied with the inclusion of $93,000 in transfer tax revenue from Fairway Village, which has already seen progress on the site. But he cautioned the town on overall projections for a recovery in the area’s overall real estate market and on Canal Landing in particular.
“I’m having increasing concern about Canal Landing,” he told the committee, citing the failure of developers to complete the land purchase or approach the town about annexation.
Grimes said a check of the Multiple Listing Service that afternoon had shown him only eight home sales pending in Ocean View, with just six to eight weeks left in the fiscal year. The town expects to fall short of budget projections for real estate-related revenues for the current fiscal year by as much as $100,000 as the market remains slow. But the town took in just $4,000 in transfer taxes in January 2007.
The Realtor cited a normal two- to three-year cycle for the local market, consisting of those brief periods of ups and downs. He said the five-year boom that preceded the recent slowdown was the unusual aspect of the situation.
“You would be very naïve not to believe there’s a lot of risk in this,” Thomas put in, relating recent economic indicators that show the real estate market nationwide still very troubled. “And Ocean View is forecasting a turnaround in the market.”
Indeed, Gregory’s long-range budget calls for resales of homes in Ocean View to increase by 50 percent over the next five years, while new construction is anticipated to increase 77 percent.
“I don’t believe it will decrease,” Thomas added of his outlook on the town’s real estate market. “I thought we were at the bottom, but it seems maybe we’re not.”
Despite the rosy forecast in his budget, Gregory acknowledged the possibility that the town may have to deal with a gloomier picture when that future becomes a reality.
“If items don’t come to fruition,” he said, “we’ll start over from scratch.”
“I believe we will need to look at tax increases,” Gregory warned, if the real estate picture does not improve. “Transfer taxes are a great concern to me.”
“The town will need to look at tax revenue because we won’t have the revenue,” Thomas predicted. He said recent calls to reduce reliance on transfer taxes would come into being even without direct steps taken in that direction, because the town will lack transfer tax revenues and have to make up for them with property taxes and other sources.
“Unless we’re willing to talk about severe cuts,” Thomas added, “without that revenue we’ll have to increase taxes by 15 to 20 percent per year.”
But he also warned against the town immediately moving to spend revenues generated by any future property tax increases, calling it a potential “double whammy” if taxes are raised only to again run short of funds for future lean times.
“We raised taxes last year, and it took us 45 minutes to spend it,” he admitted. “Discipline is very hard.”
Resident Gordon Wood issued a further note of alarm on the subject, asking committee members if future “build-out” of the town had been factored into future fall-offs in transfer tax revenue. It has, Gregory said, but Wood said he fears the town could reach near build-out in five years and find revenues even tighter than expected.
“We may be creating a bigger problem than we think we are,” he said.
Wichmann also urged the committee and council members to take in consideration of the town’s comprehensive plan, which has a major influence over issues such as annexation. He said he feared the town may be missing opportunities for annexation and end up with isolated enclaves of unincorporated development for which the town will end up having to provide service such as police protection, without accompanying property taxes to draw upon.
Committee members planned to mull over the most recent draft of the 2009-fiscal-year budget leading up to the March 4 meeting of the town council at which it is to be introduced. The committee will meet that evening, at 5:30 p.m., prior to the council session, to finalize the draft before it is introduced.
The council must present its budget between March 10 and 15, with approval set for April.